The Individual Retirement Account (IRA) is the most important building block in your retirement plan. This is because of the significant tax benefit you will receive if you invest your money within an IRA.
* Money contributed to an IRA is not taxed that year.
* Interest earned on these contributions is not taxed as long as it remains within the IRA.
* The contributions and interest are taxed when they are taken out of the IRA.
The impact of investing in a Traditional IRA is that your money will grow faster than if you invest your money outside of an IRA.
For additional information about IRAs, see my series of articles.
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For more information about IRAs and retirement planning, see my book Family Child Care Money Management and Retirement Planning.